With the principles outlined in Make Time, you have the potential to dramatically improve your life in a short period of time. Plus, hear an inspiring FI story and tips for teachers.

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Summary of Episode

• Jonathan used the principles in Make Time to make big changes to his lifestyle. After building out an ideal day, he was able to start implementing a schedule that works better for his life and family.
• Brad took the lessons learned in Make Time to add friction to the ever-present infinity pools of technology. He deleted most of the apps from his phone to make it more difficult to be distracted by it.
• Don shares a tip for teachers that need help stocking their classroom. Teacher Treasures is a store that will allow teachers to take what they need without any charge.
• Nicole posted about her journey to Financial Independence after an objectively difficult path. She shares that it is possible for anyone to pursue FI, regardless of your background in life.
• Sean, the FI Tax Guy, calls in to answer a listener question about qualified dividends. Essentially, you should notice that your qualified and ordinary dividends are reported in separate boxes of your 1099-DIV form. Otherwise, it is likely that you are not receiving the tax benefits.

Resources

• Make Time by Jake Knapp and John Zeratsky
• Atomic Habits by James Clear
• Design Your Future by Dominick Quartuccio
• StartEdUp Foundation
• Teach Treasures
• StartEdUp Podcast
• The Simple Startup
• MentorZ
• FI Tax Guy
• More information on your 1099-DIV form from the FI Tax Guy
• Smile Always Chrome Extension
• 2019 tax brackets for capital gains

Related Episodes

• Make Time With John Zeratsky
• Atomic Habits With James Clear
• Eventual Millionaire with Jamie Masters
• Education Through Innovation With Don Wettrick
• Design Your Future With Dominick Quartuccio
• RIP Medical Debt- An Inside Look At Debt Collection And Forgiveness

Table Of Contents

• Make Time
• Challenging Defaults
• Increasing Friction With Technology
• Teacher Treasures Tip From Don Wettrick
• Motivation From Nicole
• RIP Medical Debt Tip
• Qualified Dividend Tax Question
• Book Drawing

Sample Calendar

 

Make Time

Jonathan: All right everyone, on today's episode, I already thought of the title. Prioritizing your priorities. I mean, that's honestly what this was. This book, Make Time, the interview with John Zeratsky, incredible interview. Honestly, one of the ones I was most excited to do going into this year because for where I am, the stage of life I am, the things that I'm grappling with personally.

You had been recommending it to me. I hadn't been putting it off, but I hadn't been prioritizing it, just because I felt so busy and at the same time I felt so unproductive and at the same time, you know, it's just kind of this blurring. He described it in the interview.

I really needed this book and I hope as a result of the conversation, our audience kind of understands why. I'm excited to go deeper with some of the action that both of us have taken in the intervening weeks to help me with this.

I have my cohost, Brad, here with me today. How you doing, buddy?

Brad: Hey, Jonathan. I'm doing quite well.

Yeah. I have been looking forward to this Friday Roundup actually for a while because I cannot wait to hear about the changes you have made. I know the conjunction of Atomic Habits by James Clear and this book, Make Time by Jake Knapp and John Zeratsky. I mean, you basically made wholesale changes in your life.

Jonathan: Yeah, I don't think that's an exaggeration.

Brad: Not even a little. Right. And so how long has it been now since you've read those books?

Jonathan: Oh yeah, I could actually pin the date down because I picked up the book. I finally read it knowing that I was running out of time to read it. I finally started to read it right over Thanksgiving weekend.

I was actually in the airport. And then airports... like the plane is a convenient place to read a book, the actual airport, maybe not so much. Waiting in line, not so much, but I couldn't put it down. Page after page. I was turning and I was like, this is exactly where I am.

Brad: All right, so you're a couple months into this experiment now.

I mean, what does this look like for you? Because like you mentioned in the episode with John, ChooseFI, in a good way so you thought, had basically taken over your life, right? Like it's this super exciting thing. It's your baby, it's making a big difference in the world.

All these things that sound good in theory, but you were probably spending 60 to 80 hours in some way, right? It might've been grazing. It wasn't 60 to 80 hours of productivity, obviously. If you had to make an argument or maybe if your wife Dani had to make the argument, you probably were spending 60 to 80 hours grazing slash thinking slash somewhat doing stuff on ChooseFI.

Jonathan: I didn't have a mechanism for putting it in a box, putting constraints around it and doing so in a way that felt fulfilling. I felt like I was leaving productivity on the table, leaving being effective on the table.

And it's really this book brought together all the other tools that we have been talking about on this show. And I'll actually reference a few others. We recently talked with Jamie Masters. That episode went live over the Christmas season in December. Atomic Habits, talking about taking intentionality and turning it into action.

How do you do all that if you don't feel like you have any time? Right?

Well, maybe the answer is just to work more. I think that's what many of us, especially in the entrepreneur space, go to. We'll just work more. Maybe that's not really the answer. Maybe it's really prioritizing your priorities. And so I actually have found myself talking about this idea with friends and neighbors, obviously on the podcast, but it's been such a game changer for me.

And part of it was, as I was reading the book, John Zurawski and Jake Knapp, who are the authors, are talking about how they realized that they were always reacting to everyone else's priorities. Right. And the chaos that that would cause if they didn't question that, if they didn't insert their own priorities in there.

And so in the thing, they were talking about how you could put some reasonable constraints in place to reclaim some of your time and it was making the case that... And they were saying, you may not be in a position where you can do all of this. I mean, some of this is going to require permission from your boss, permission from your employer. You're gonna need to get buy-in from other people.

As I'm reading that, I'm like, oh, yeah, yeah. And then I just pause and I said, wait a second. And I said this in the episode because it was that big of a deal. I was like, Brad, you and I set the hours for this business. Right? I mean, this was a lifestyle business, the lifestyle side hustle that we started. It literally, the top-down is here. Right? And so for me, just to let it spill over into everything and never question that is the height of insanity, right?

Brad: And it's questioning the default. Right?

The default for you was to always be there, to always be able to respond, do every little beep and shake of your phone. Right?

Jonathan: I become a slave to this thing. Gosh, I hate using that word, but honestly tethered, right? I mean, I was tethered to this freaking phone and it brought me no joy. How often do you check your phone and it brings you no joy?

Brad: Pretty often, and it brings you a lot of just nervousness and anxiety, right? To have that phone that is just... It's one second away. You never know when that beep is coming.

And John said they never questioned the defaults of anything. Right? They talked about when they were originally, Jake and him, when they were originally going through this, they were obsessed with quote, productivity optimization inside of these massive tech companies that they work for it.

But they were sitting in these pointless meetings. How many people in corporate America can relate to that? I know I personally can. Every single meeting I ever went to was a complete and total waste of time. I can't think of one that I got any bit of value.

And I actually thought about it. I'm like, there are seven human beings in here for an hour. That's seven person hours wasted just off the face of the planet. And people don't question like, why do we do these things? Right? And he said they pursued this productivity inefficiency, but realize that it didn't make them feel good because they weren't doing what they were interested in most.

And this concept of the defaults, right? We talk about that with our phones. People aren't even aware that the defaults of your phone or the defaults of life can be changed. All these things are engineered to distract you. But you can just get rid of them, right?

Like I even questioned this, in the episode with John, is like what's going to happen? What is Google going to do to me if I take Gmail off my Android phone? Like, is it going to blow up? And I mean, I was kind of kidding, but who the heck knows.

Jonathan: It's actually really hard to delete Gmail off your phone.

Brad: I mean, no joke. It took me five minutes in that recording.

Jonathan: I kept the camera on him the entire time on the YouTube video, just so he could like time it, actually have a timer at the bottom of the video and it was approaching like six minutes, six, seven minutes.

Brad: It took a long time.

Jonathan: Of like actual, like you weren't... We're interviewing John, you're not even looking at John. You were looking at your phone because you were like challenge accepted. I'm gonna delete it right now. It took you six minutes to come up for air.

Challenging Defaults

Brad: Yeah, it was crazy. So anyway, challenging defaults, right? I'm looking at your calendar now and I'm seeing massive blocks of color-coded items here on your Google calendar.

Talk me through like what did you change in the defaults of your life?

Jonathan: I think this is such a big idea. I'm actually going to share my actual template calendar with people on the show. So if you're watching the Friday Roundup, or if you'll go to the show notes, you'll see a screenshot image of this.

But just before we even go into the breakdown, let me just set a framework for you. Your life, regardless of what you do, has some pattern or predictability to it. Now, it may not be obvious, but there are things that you intuit, things that are coming on a somewhat regular basis. It may not be every week. You may have a biweekly schedule, you may have a monthly schedule, but if you were to really slow down, you'd figure out that there is some regular cadence to your life.

Your life, regardless of what you do, has some pattern or predictability to it. Now, it may not be obvious, but there are things that you intuit, things that are coming on a somewhat regular basis. It may not be every week. You may have a biweekly schedule, you may have a monthly schedule, but if you were to really slow down, you'd figure out that there is some regular cadence to your life.

And that cadence dictates what you can and can't accomplish. There's some non-negotiables and there are some things that can be moved based on your priorities.

At our stage of life, and for many people that are either pursuing or have reached Financial Independence, you have a lot of autonomy over your schedule. In fact, that's kind of part of this whole, you get most of the benefits of FI before you reach it, and you can start reclaiming this power, start making unreasonable, "unreasonable requests".

Start acting on this. So you may not be able to do all of this now, may be a version of this. But you can start working forward.

In my case, as we said, this is top down. This is a business that we created to fit around our lifestyles. We are family guys first. Our families come first and foremost. The business sacrifices to that, and for the best. And this business is predicated on great relationships with our family. So that is prioritized first.

So first, I don't start with what does the business need. Though I did two weeks ago. I started with what does the business need. And we had some things, some cadence built in there.

But I went back and I said, you know, what are the non negotiables? Like for me at this stage of life, part of this arrangement my family is I am available for my family every single night from 5:30 to 7:30 PM. Dinner, put the kids down, that sort of thing. That was not in my past. As a pharmacist, I was working every other night, nights and weekends, crazy randomness. There was a predictability even in that. But a crazy predictability, a stressful predictability, but it was there.

But with this, I can make sure that 5:30 to 7:30 is locked down. That's for my family. And then I can say, all right, if that's not negotiable, it would be nice to have that consistent experience Monday through Saturday. Maybe it was only five days a week, but still, if you can map that out, let's start our calendar there. We know that variable and then say, all right, wouldn't it be nice?

Now again, this is your ideal day. It's not every day. It doesn't mean that you can't break this. In fact, like maybe only 30% or 40% of the time you follow the calendar. Wouldn't it be nice to know where you were supposed to be when you were looking at your life from a macro level with intentionality? Thinking about your ideal day, what would a good day look like? That's what this calendar is.

Now again, this is your ideal day. It's not every day. It doesn't mean that you can't break this. In fact, like maybe only 30% or 40% of the time you follow the calendar. Wouldn't it be nice to know where you were supposed to be when you were looking at your life from a macro level with intentionality? Thinking about your ideal day, what would a good day look like? That's what this calendar is.

I have this set up on Google as a template that I can take the visibility on or off.

Have you ever wondered what am I supposed to be doing right now? And you don't really know, so you don't do anything. You just check your phone, you go watch some Netflix. You don't know. What if, while you actually had some bandwidth, you had some margin in your life, you had some energy, you actually created your ideal day.

So I said, you know what? I say that my relationship is important. Wouldn't it be nice if at the end of this year, I looked back, and after we had the kids down at 7:30, from 7:30 to 9:00 we carved that out as a time that my wife and I, we had some tea. We love tea, we drink tea together, and we spent some time either journaling or just having some conversations. Not just drones, watching Netflix, but having some conversation.

What you'll notice very quickly is when you're looking at your life from a macro level. Not when you're stressed out, not when you're just muddling through, not when you're drifting, but when you're actually in an intentional place, you're not going to write down time to catch up on Friends. You're not going to write down time to watch Netflix. I can't imagine.

When you're actually in a good place with energy, you're thinking about what you really want to do and when you're drifting, when you're just watching TV, it's because you haven't had a plan. You're just trying to get through the day. You're not thinking intentionally about what you wanted to do. So those are two things, and you could kind of work your way back.

Brad: All right. So, okay, so 5:30, essentially on at that point, that family time and relationship time. That's carved out every single day. So that's amazing. Now I know we like to joke about Jonathan time now, right?

Brad: So the morning, as I understand it, is time that you've carved out for priorities for you, for learning, for exercising, right? Talk us through like what does that time look like?

Jonathan: Yeah. So you know that decompression time that like many of us feel like we need, like I used to feel like I needed like some level of decompression time and I think it's because I felt like I hadn't been productive with my day. I hadn't gotten stuff done, so I needed some time just to 'catch up' on all the stuff that I hadn't done.

Well, what if you could just get it all done, right? And so I realized it's kind of difficult for me to get stuff done at night, for some of the reasons I just laid out. But what if I could actually get it done in the morning?

So I reverse engineered this. I've heard so many people talk about the power of getting up at 5:00 AM. What if I actually did? So if you notice at the very end there, I said if you're going to wake up at 5:00, you can't stay up til 11:00, right? It just doesn't work that way. You can't do it.

So I actually set myself this goal, well, what if I went to bed at 9:00? That sounds really early, but what if I just tried it? Would I be able to get up at 5:00? If I got up at 5:00, what would actually encourage me to get up at 5:00? Well, what if I made my ritual? We talk about ritual. Talk about habit stacking with James Clear, times to do that.

What if when I got up at 5:00, I have a process I've talked about. I love making pour-over coffee. A cup of pour-over coffee is like one of my joys in this world. When you can drink a cup of coffee black and it brings joy to your existence, that's when you know you're winning. So it's not a hard sell. If I get up at 5:00 to roll out of bed and go make this ritualistic cup of black coffee.

If you've already done that, you're kind of in a good place. You've already checked one thing off your list.

So now let's say I give myself 30 minutes for that window at 5:30. Now I'm rolling into the next thing, which could be some form of mindfulness. We all say we, whether it be spirituality, spending some time... If you're religious, spending some time practicing your faith or just spending some time in meditation or whatever it looks like for you. Spending some time getting out of your own way. Deep breathing, just slowing down. You're not checking your phone though. This is not you going to these infinity pools he talked about.

If you've done both of those two relatively low, easy asks, I guarantee you you're already so motivated that it's pretty easy to roll onto the next thing, which is maybe it's journaling.

Journaling is a great way to stay glued into whatever your plans are. Maybe it's meal prep because you have an intention for your day. You want to get these meals to teed up.

Maybe you have a list of questions, like my mind is peppered with questions. The more you start asking questions, the more questions you have, but instead of just going immediately to YouTube with every single one, what if you just made a list throughout the day of all the ones you had and saved, when you can just compress them all together.

Now, if you've given yourself this window, by this point, this is talk about habit stacking, each additional thing that you execute on gets you motivated to do the next thing. Now we roll out and now maybe we're looking at like 8:00 AM. Let's give ourselves two hours for health and fitness. So whatever that looks like, going to go to CrossFit. You're going to go out in the garage and workout. You're going to go for a run around the block. Go do yoga class, whatever that looks like.

If you were able to roll through those four things, you've already crushed the day. So then now we're at 10:00 AM in the morning. Leave this as unscheduled time. You don't need to schedule every minute. The point of this is not to confine you to a five minute blip, but to rather give you a framework for where you said, in your perfect world, you would be at a specific time.

So 10:00 or 11:00, I check in with my kids. And then really at that point, that's maybe the first time where I give myself permission to now check my email. There's some variance there. But now I've created this framework and I said, oh wow, that's the window. So in my perfect world, my idealistic world, everything that I'm getting done for ChooseFI would be inside this 11:00 to 5:00 window.

Brad: Yeah. And I love that, and we talked about this with John, is that the work always fills the time that you have available. So if you can put these rigid constraints on that, in all likelihood, you're going to get at least as much accomplished.

And I suspect by having these pockets of potentially deep work where you already feel good about yourself, right? Like you've done these amazing things, you're in a great head space at that point, and you're sitting down and saying, all right, I have X number of hours. And I think it depends on the day. You probably have three to five hours or thereabouts. What can I get done? Right? I feel fantastic right now. I know that I have this amazing family time coming later. So it's not like I have to feel guilty, right? These are the hours that I've carved out for my work and it's not taking over my life. That's the beautiful thing.

Right. So I'm curious, like have you noticed offhand that you feel more productive or that you've gotten more done by actually putting these constraints on? And probably taking it from 60 hours a week of grazing ChooseFI time to probably 20 hours a week of very rigidly defined ChooseFI time.

Jonathan: Yeah. I think what this was, is the culmination of what we talk about in terms of leveraging our super power of Financial Independence, right? Reaching Financial Independence and reaching 'early retirement'. If that's your goal.

It has never been about not working. It's about changing the priorities and making work something that fits in our lives instead of taking over our lives. Right? It's something that adds value instead of something that we need to escape from.

I absolutely feel like I can do all the work in the time allotted. This is not a fixed thing. If I felt like I wasn't getting it done or it was trapping me, then I could change the schedule. You're not locked in, this is an iterative process.

But what I think you find is that you actually know you need to get it done by this deadline. You actually understand the pattern because you can see it now. It's there. You can turn it on and off, but you can see it. And you lean in.

I love your point about your work will swell to fill whatever time you give it to. Why would you give it 60 hours? There's too much to do in this world to give it that amount of space.

The last thing it really surprised me tied to this was I thought going to bed at nine o'clock would feel like a prison. Like how could I possibly... I've been giving myself till 10:00 or 11:00 or whatever. But if you've done everything I laid out... Right now, I'm looking at this and say everything I wanted to get done today, I have done. That level of accomplishment. You go into 5:30 saying, crushed it, you know?

And then that just feeds into itself. And if you're making the choices you want to make, you're actually... Dominic Quartuccio talked about this in his book, Design Your Future, and it was talking about that 95-5, where 95% of our actions go at an unconscious level, right? What if we could just stretch that 5% to 6%, right?

What if we could just get a little bit more intentional action? How would that change our world? Help us design our future. This was it. When I'm in a positive place, I said, what would I want my future to look like? And then I built that out and then it required some changes like... I think there was an impact on the individuals on our team, on you, on other people. It's not that this happened in a vacuum. There was communication that had to be involved, but I think it's worked.

It worked to your benefit as well. There were things that you wanted to do that maybe we didn't give ourselves permission to question.

Brad: And yeah, this goes back to the default, right?

And you mentioned this when we were speaking with John, is that we just had it as a default that on Tuesday morning we started to record our Friday Roundup at 9:00 AM. And that was a terrible time. Really, if we're being realistic, it was a terrible time for both of us, but that was what we had done for two-plus years. And we didn't question if for whatever weird reason.

And the same actually goes for recording our Monday episodes. We batch them, and not to further confuse everybody, but we'd record them on Thursdays generally. And we used to have it that, okay, you can basically schedule, as the guest, anytime from-

Jonathan: Anytime.

Brad: From 8:00 till 5:00 PM. So we'd have one at 8:00 AM and then at 2:30 PM. And that was ridiculous. I mean, utterly ridiculous. And that didn't serve us at all.

Jonathan: Yeah. Because you would just be standing there holding your hands in between episodes. Right. Whereas with this in mind, all right, well, this is our framework. This is our time. We have two slots available in each of these days. Here's what we got. Pick one of those two.

If it doesn't work for you this week or next week, pick one six months from now, right? At some point down the road, we can do it then.

And that was the thing about this. Once you start doing this in your life, it actually has an impact on those around you. What I actually found, surprisingly, Brad, was that with my wife, this obviously affects my wife more than anybody. But it actually affected her to positive because part of this was a collaborative getting buy in from her. When I found out what she needed, prioritizing that first. Then she saw my schedule. She says, well, I want to schedule. Can we do this for me?

And this was what was so interesting. I would find that she would really want to do different activities at different times. She'd be desperate to for us to go do something as a family at different times.

Jonathan: I didn't always have empathy for why she wanted to do this until we created this ideal schedule for her as well. And we realized so much of her time is taken up with the kids, which is obvious, but you don't realize that getting out of the way, having some time to decompress, having some time to do a family activity, it's really important as part of a structure of her day.

So we were able to build her ideal calendar out, and then we were able to look for the overlap. And this is where it comes to the highlights. These really memorable moments. Things that are urgent, things that are incredibly fun. Things that light you up or move you forward. These are what you can start to build the cadence of your life and you should try to have them scheduled hopefully every day. That was John's goal, but at least certainly several a week of varying magnitudes.

And by now looking at the overlap between hers and mine, some can be just my own personal highlights, maybe hitting that gym once or twice a week and knowing that that's anchored in my schedule.

Two, maybe making with us knowing that, okay, on Thursday afternoons in between this time and this time, that's the one space that we have for a two hour gap for us to do something as a family. Why don't, instead of us just waiting till that moment, us come up with the list of two or three planned spontaneity, right? Just a few or three options that we could do at any given time.

So when it comes to that point in time, she isn't forced to ask, what do you want to do? I don't know. What do you want to do? That cycle continues and continues. If you understand the cadence of each other's lives and you understand those sweet spots and where's there's that overlap, you can actually start to get a few of these highlights built-in and it comes together and affects so much more than just your priorities.

Brad: Yeah, no, I absolutely love that.

Increasing Friction With Technology

And it's so interesting how you and I both read this book and have implemented changes, but actually in two dramatically different ways, right?

So you have basically revolutionized your schedule. And honestly, I'm pretty envious. I have not done this to that degree. But what I've done is I've increased the friction. And specifically when it comes to my phone and my computer, to a large degree, honestly, I haven't been as good with that as I'd like to, and I'll talk about that in a minute.

But really, I was never one of these people, and you can probably hopefully vouch for me here, who is terribly addicted to my phone. I mean, in the continuum, I was probably on the lower end of addiction.

But still, nonetheless, I was not happy with my phone usage. I just simply wasn't. We talked about the one ring from the Hobbit and Lord of the Rings. That is what it felt like. And it doesn't feel good when you wake up and the first thing you do is roll over and pick up your stupid phone. Right. It feels like... really like this precious and I just wasn't satisfied with that.

So as we talked about, quite literally on the episode, I deleted everything. My phone is pretty much an inert object at this point. It has text messaging, so anybody who has my phone number basically and texts me. So I mean, these are my closest friends, family, etcetera. That is one thing that's still comes through, phone calls, however rare they may be, that comes through. I have my podcast player, I have Spotify to listen to music. Most recently we've been rocking out to Hamilton, the musical.

Jonathan: Nice.

Brad: Yeah. So my kids are getting into that. And I have a meditation app, and that at this point is pretty much what I use my phone for. I got rid of Facebook, I got rid of Facebook messenger, all of my email apps I got rid of. Like you talked about that infinite scroll of, hey, these are the latest stories that Google is serving up for you.

So all of that stuff, while that still exists, I guess technically on the phone, I made it so on an Android, when you swipe left from your home screen, nothing works. I mean, you showed me that and it's really been amazing. I mean, I don't crave the phone anymore.

And sure, just like anybody, I fall into bad habits. There'll be times where I'll pick it up. And again, it's friction, right? That's the beautiful part is I have to now press a couple of extra buttons. And I sometimes catch myself in saying, hey, dummy, what are you doing? You don't want to be doing this. That's why you put the friction there.

But I'm a work in progress just like everybody else. So this is certainly not something that I'm perfect at, but man, just getting rid of those apps has made a huge difference.

Jonathan: And it's important to point out. And John was saying this, but just to stress it, like this was not an anti-technology episode. Like really, I'm never going to be walking around showing you my flip phone. I'm not going back.

Right. I don't use my phone as a phone. I haven't in years. That's not what it's for, for me, which is why I get it as cheaply as possible. Right. Can we spend less on the phone, please? It's a smart device, but it is to put its place in my life appropriately. The apps on this phone are incredible. I use it to listen to podcast. I use it for GPS. Are you kidding me? I don't think I would survive without GPS.

Brad: Oh, I did forget GPS. I definitely use Google Maps quite a bit.

Jonathan: I use it as a password server. I use it for some meal planning apps. There's just several very important functions that this thing serves in my life. But when you find yourself checking your phone, living into this statistic of touching it 2,000 times a day, which is terrifying, but at the same point-

Brad: You may have made up that statistic.

Jonathan: No, no, I didn't. John did, but I don't think he made it up. I think it actually is a real statistic.

And even worse, and this is the most painful part. If you find yourself, your kids are trying to get your attention and you're just like swiping down in your phone to refresh Twitter or whatever. Like if you find yourself there, you've gone to a dark place and you need to find a way to put the technology back in its little box. Get all the best from it, but don't let it take over your life and take your most precious nonrenewable resource, your time.

Brad: Yeah. And again, this is not anti-tech at all. It's anti-infinity pools, right? As John and Jake called them. It's anything that has an endless scroll, that constant refreshing where you can just go down the rabbit hole, right? And spend hours on something and not even realize it. So I think that's the aspect. And it's not also saying that those things are universally bad, it's just that there's a time and a place for them. And I think John even mentioned.

Jonathan: Scheduled Twitter time.

Brad: Exactly. He talked about scheduled Twitter time. And if you make that 15 minutes once a week or even once a day, if Twitter's your thing for whatever reason, then that's great. Right?

But it's the endless scrolling. It's 15 minutes that turns into five hours, which can happen to people. So it's being cognizant, I think first, of how impactful those infinity pools can be, and then trying to cut them out again from these phones because you do it when you're just mindlessly scrolling.

So I think personally, getting them off the phone and then being intentional about it, sitting down at your laptop during that allotted 15 or 30 minutes. Logging in, putting in that password, right? Not just auto logging.

Jonathan: I do auto login. But on my desktop-

Brad: Okay, that's fair. But any bit of friction you can build into it is useful.

So anyway, these are just tips. There's nothing from on high here. We're not saying you have to delete everything. I mean, come on. You got to figure out what works for your life. I know this had worked dramatically well from my life and Jonathan for you as well.

Jonathan: I got to stress this. The book is a simple book. It's not a difficult read, but it's one that I think you'll find encouraging and I think you'll get some actionable tips out of, so the book is called Make Time, definitely check it out. And found anywhere that books are found.

My neighbor, as we got into one of these conversations, I was really taken with the idea. I bought him a copy. That's how much I was like I wanted to share these ideas with him. So definitely, definitely worth your time and energy to give this one a read.

Jonathan: All right, well, let's go ahead and switch gears. I want to bring MK into this conversation. MK is our showrunner and also brings in community feedback, mailbag questions, etcetera.

MK, how are you doing today?

Teacher Treasures Tip From Don Wettrick

MK: I'm doing great guys. I'm always so happy to be here, to bring in the tips from the community. They have so much to share. And one thing that's really great is Don Wettrick, who was on episode 87, he shared some Teacher Treasures.

So for all of the teachers listening, he said that he was amazed by Teacher Treasures, which is a resource center for teachers that work in high or free reduced lunch schools. So typically schools where students are lower income and then therefore there's not as much money for the teacher resources either. So he said this place has so many things for teachers. They believe that teachers shouldn't have to pay out-of-pocket supplies. Kudos, Teacher Treasures.

So the store is in Indianapolis, Indiana, and I think this is a great model. So if you have a store like this in your local community, or you want to start one, check out Teacher Treasurers in Indianapolis, and maybe that's something you can bring to your community too.

Brad: That is amazing. Yeah. I'm looking at this post that Don put up. And yeah, it looks like this entire enormous store. Of just items for teachers. And I guess... are these things free? MK, am I hearing that right?

MK: That's my understanding from what he put there. So they believe teachers shouldn't have to pay out of pocket for supplies. So it seems like they can just come in and take the supplies that they need, which is amazing.

Brad: That is so cool.

And yeah, I know I've said previously on the podcast that we certainly believe in supporting our own kids' teachers. Basically at the beginning of each school year, Laura and I send an email to each of their teachers and basically just say like, hey, do you have a wishlist of items for the classroom? And just send it over. And you know, I think we've spent somewhere between a $100 and $200 each year, just kind of buying them things. My mom has actually sewed seat back pockets for the kid's chairs, so like 25 of these things. So yeah-

Jonathan: 25?

Brad: Yeah. It's crazy.

Jonathan: Mass production.

Brad: Yeah. My mom is a very skilled at that and she enjoys it. And yeah, it's just really nice to be able to support teachers. And I think that's a beautiful aspect of FI is that you can put your time and your resources where you value it, right? It's not about being cheap or ultra frugal.

And I think that's a beautiful aspect of FI is that you can put your time and your resources where you value it, right? It's not about being cheap or ultra frugal. Like I've said repeatedly, we've set up a framework of a life that just doesn't cost that much, but it enables us to spend our time and our resources in avenues that we really truly value

Like I've said repeatedly, we've set up a framework of a life that just doesn't cost that much, but it enables us to spend our time and our resources in avenues that we really truly value. So it's really neat every year to get these thank you notes from 20 second graders saying, oh, thank you so much for these toys and these seats that we got from the class and books and things.

So it's been really good. And this is wonderful. And this is that at scale, obviously this is dramatically better than just my own little one person thing here.

Jonathan: Oh, don't downplay yourself.

Brad: No, no, no.

Jonathan: It's really remarkable. What you're doing is very, very cool.

And I know it's crazy the guilt teachers feel when the kids don't have what they need, you know? I know my wife was fortunate to work in a school system where they did have a pretty decent budget, but she even felt a small amount of that. And teachers that are working maybe in title one schools or schools with very low budgets, often they're taking their own money in there just to give these kids the basics.

And so to have for you what you're doing, but also teachers around the country to have resources like this and us as a community and potentially over time, a community with means if we can have an impact. It doesn't necessarily always have to be at scale. Can you have an impact in your local school system?

That's incredible, man. So we'll have a link to that in the show notes and actually... just to throw a line back here to Don.

Don has an incredible show.  So he started the StartEd Up Foundation and it's a nonprofit helping shift the education model entirely. Teach entrepreneurship in schools. You are right to point out the episode we had with him.

I think it will light a fire underneath you and get you excited for the educational process and really this opportunity you have with your kids to teach them a different mindset, an entrepreneurial mindset. Which I can say that like while we may not all become entrepreneurs in traditional sense, we should all be thinking like entrepreneurs. That skillset is incredibly valuable. You want your kids to grab that mindset or at least some of that mindset as quickly as possible.

And what if you could have some of that implemented in the educational system. There's some evidence to support this that our kids historically were trained to become employees. Goals were a function of an industrial society where we needed employees in mass.

As we go into this next cycle, the future, as we're all living in the future. We see increasingly the opportunities are there for entrepreneurs, thinking of creative ways to solve problems. And if we are only relying on that old, hey, two plus two is equal two... We need financial literacy too. Let me throw that example away. But just how to do rote task on time. Okay. Maybe that's a baseline, but we need to give our kids that creative mindset, give them those creative skills.

Don is not only doing this as a nonprofit, but he's also through his podcast, informing parents and teachers about what they can do to make change at, again, a local level as well.

MK: And Don's podcast really inspired Rob Phelan, who is the author of the Simple Startup, the educational book that we're going to be bringing out through ChooseFI publishing. And for that exact purpose, Jonathan, to really say, if your school, maybe they do an entrepreneurship competition, but there's no curriculum, or you as a parent just want to work through this curriculum with your child. It teaches them about a business because whether they run their business or work for a business, these are important skills to have.

So that was why we were very excited to make that our second publication with ChooseFI publishing, and that's at thesimplestartup.com.

Jonathan: And talking about having an impact on the local level, it's really cool when you take these ideas and you see your kids take the mantle on them. So we're talking about Financial Independence, but in the spirit of entrepreneurship and Don Wetterich, his daughter Ava has taken that spirit, that entrepreneurial spirit and run with it.

Don told us a little bit about this, I believe, in the episode. He said, Ava, she said she couldn't find any good role models that were really embodying the spirit of what she wanted to find. You know, it was always lifestyles of the rich and famous. The MTV generation. What she really wanted was entrepreneurial role models and she couldn't find anyone speaking to her generation, generation Z in this case.

She said, I'm gonna go out and find them myself. She started a podcast from scratch, I think it's called MentorZ , and she's doing about one podcast a month, and she's going out and she's getting her role models. These people that are out there that have forged, trailblazed this path, they're coming on her show.

You might say to yourself, who am I? How can I get access to these people? You know, that sort of thing. Like if you're doing this young and you're not seeing any role models around, you create a platform. And it's amazing to me the access that she's been able to get and the content that she's been able to produce.

So actually MK, I was wondering, we talked about this in the past, never followed up on it, but I really think we should try to do it this year. Would you reach out to Don and see if him and Ava want to come on the show maybe for a Friday Roundup, and talk about some of the lessons that she's learned, in particular as they are applicable to her generation, generation Z?

MK: Absolutely.

Jonathan: Awesome. All right, well let's make a plan to do that this year. Let's go ahead and switch gears. What do you got in the mailbag?

Motivation From Nicole

MK: Well, next up, I have a really powerful post that came in on our Facebook group from Nicole, and she talks about overcoming on her journey to FI. And I could tell she was a little fired up when she wrote this.

So she said, after seeing so many articles and post about not being able to reach FIRE,  I want to just share a sliver of my own story for now. I was born into poverty, like my mom used to make me go out with my sister at age seven to twelve, go collect soda cans off the side of the road so she could sell them to buy more cigarettes poor.

Then I got pregnant at 15. I had my first son at 16. I doubled up in school and graduated at 16 and went straight into college. That wasn't easy at all. In fact, I used to have to take the public buses to college. It was an hour both ways or find rides. I remember one day my ride dropped me off and my second ride never showed up, so I had to walk about 10 miles or so in 30-degree weather, but I did it. I became a registered nurse at 18.

Fast forward, I am 26. I have four kids on my own and one that I have custody of. I make $67,000 a year and my husband makes $31,000, plus our rental income. I own a single family home myself, have sold another home that I owned, and my husband and I own a duplex. We house hack with five kids in a two bedroom and we are on the track to retire in less than 10 years. Anyone can do this if they want.

And I just thought this was such an amazing story that she has overcome so much and she's still so young. She still has so much more that she's able to do. And I think that was just so amazing. So congratulations, Nicole, for everything that you've pushed through and for everything that you're going to still accomplish.

Brad: Wow. MK, that is amazing. I think the last line there, anyone can do this if they want it. Right?

It's so easy to come up with excuses. I hear them all the time. Oh, I live in a high cost of living area, even though I make $200,000 I can't pursue FIRE. Right? Like you hear lots of excuses, but if you truly want it, you can find a way.

And obviously, like we say here all the time, there's no dogma on the path to FI. We're not standing here telling you and preaching from on high of any particular method or anything. But if that's your goal, you need to decide what you want in life, right? And what you're willing to do to get there.

There's no dogma on the path to FI. We're not standing here telling you and preaching from on high of any particular method or anything. But if that's your goal, you need to decide what you want in life, right? And what you're willing to do to get there. So I think there's always a way, but again, that's not me saying you have to pursue a path to FI in seven years, or you have to do X, Y, and Z. I think that's really critical, but you have to take action, right?

So I think there's always a way, but again, that's not me saying you have to pursue a path to FI in seven years, or you have to do X, Y, and Z. I think that's really critical, but you have to take action, right?

Jonathan: That is incredible. And as I'm sitting here listening to Nicole, sharing this story with us. I'm just blown away on so many levels. One, her life, she's had to work through stuff that you and I simply haven't. We were sitting here from a place of extreme privilege compared to what it is that she laid out for us, but to the optimism that she showed.

It's an optimism, outrageous optimism that we share that this is possible for everybody. To her point at the end there, I wanted to highlight this. Anybody can do it, and you said it as well. Anybody can do this if they want this enough.

I think Nicole is very, very rare in that if you're doing this, if you're trailblazing this, you don't know anybody in your social circle that has done this. You're truly out there forging this alone without any inspiration. That's a story we need to find out how, how did you have the audacity, how did you have the skill set? How did you avoid the pitfalls that come with not knowing anybody else that's done this?

But what she is doing by having done this and we'll have to find out more. I'd love to follow up with her and find out more about how she knew to make these right decisions, right? But once you have just a few role models in your life, like Nicole, who are willing to come back and share their story and say this is possible if you want it enough. If you and I were just to say that, that would be the height of arrogance, right?

For us to say that, I haven't had to go and collect soda cans in order to be able to afford to pay my bills or so my mom could go buy cigarettes. That is not my story. I couldn't say that. It would be inauthentic for me to say that, but she is able to say that from a place of truth.

And it is true. But it's even easier for now those that are coming behind her because now they have some role models and people that have said, you know, everybody is saying this is only for people who make above the median income, who had it perfect, who had a silver spoon, who had etcetera, etcetera. And Nicole saying no, no. If you want it enough, it's possible.

And because I'm now sharing my story, because there's a group of people, a community of people that are sharing their story, you don't have to be the trailblazer. You don't have to go out into the darkness and figure this out on your own. You can learn from my mistakes. You can learn from my successes. And you can bypass this process and achieve your results with so much less frustration than maybe I found along my way. That's the point of encouragement. That's what I want you to hear when you're coming out of this.

Everybody can do this and over time, increasingly, submissions to show not just... Absolutely in fact, forget Jonathan and Brad's experiences. You know what our story is. You've listened for hundreds of episodes. I'm not sure how much further service our backstories can offer you at this point beyond what we have already covered up to this point.

But Nicole can offer incredible value, can open up this community to people that maybe have written it off because they didn't fit the stereotype that the mainstream told them they had to fit in order to be able to pursue Financial Independence. That's what you have to have come and that's the importance of widening the tent, finding more stories because it is absolutely true that someone that had objectively worse than you have it right now or have had it figured out a way to get different results. You don't need to be the trailblazer. You don't need to be on the Vanguard. You just need to follow a pave or a marked path. Let's make that path as broad as possible.

MK: Exactly. And I think one of the great things about Nicole's story, in addition to the optimism, is that she took lessons from people who weren't in a position that she was in. They may be started in a better financial position or a better position in life, but she still took those lessons and applied them.

And I know there is somebody listening right now who will write in and say, well, I have five kids and I make less. And I had my first kid at 14 not 15, or whatever it is. And they'll say, well, I'm worse off, so this doesn't help me.

And I think that just says you need the growth mindset. You need to be able to say, I'm going to pick a lesson from here, whatever it is. And even if that lesson is, wow, we all have our own challenges to overcome. That's great, but to be able to take that lesson and apply it and said of just saying, well, I need to hear from somebody who is exactly on my path.

All of our paths are so different and so unique. That's why we have to pull out those lessons where we can and that inspiration where we can, and then apply it because there's no person identical to us or our plan.

RIP Medical Debt Tip

Brad: All right, so MK, we've got another one here. Keenan wrote in about RIP Medical Debt and Amazon Smiles.

MK: Yeah. So Keenan had a really great tip for all of our listeners. I know I was very inspired after the RIP Medical Debt debt episode came out. That was episode 153. Jason and I made a change to our donation plans last year because we saw a potential ROI.

And so Keenan wrote and also inspired from that episode and said, Amazon Smile donates a portion of your Amazon purchases to a charity that you choose. I recently saw that they offer RIP Medical Debt as an option.

Additionally, if you get the Smile Always Chrome extension, you will always be redirected to smile.amazon.com, which ensures that you don't accidentally purchase items through Amazon and miss out on donating to charity. So hopefully, this can help people.

If you're on Amazon buying just your household items, buying the ChooseFI book, buying whatever. If you're going through smile.amazon.com, you can actually donate to RIP Medical Debt or any other worthy charity to make sure you're always giving back throughout the year. So I thought that was really great information, Keenan.

Brad: Yeah, that is a great email and I suspect we're going to have to get the ChooseFI Foundation approved through Amazon Smile as well. So we will definitely pass that along. That's something I honestly didn't think of until I heard this email.

So yeah, a huge thank you to Keenan. We'll definitely mention to the audience when we have that up and running.

Jonathan: There's actually a lot here. Most foundations, if they know about this, will qualify for that program. So if you work for a nonprofit, if you have a nonprofit yourself, if you have a nonprofit that you're passionate about supporting.

Then either, one, look to see if they're on that program. Or two, you could probably see if they qualify for that as well, just a very easy low hanging way to generate some additional revenue for the nonprofit that you support.

And Brad, great idea. We probably should do that.

Brad: I literally just sent a message to Ed while we're recording this to get us hooked up with that. And so yeah, it worked out well. Got to love taking action, right? We talk about it all the time. You have to take action. And I mean, quite literally, I just wrote that.

Qualified Dividend Tax Question

MK: Well, we got a question from Mark about qualified dividends and we got a response for him from Sean Mulaney who writes over at fitaxguy.com.

Mark: Brad and Jonathan, I look forward to every podcast you guys put out. Thank you for the value you're adding to people's lives that extends even beyond personal finance. I have a question regarding qualified dividends.

I know the ordinary dividends are taxed as ordinary income and the qualified dividends enjoy tax rates of either 0%, 15%, or 20% depending on income level.

In my taxable account, I own VTI, Vanguard total stock market index fund. It's basically VTSAX, but in ETF form. It pays quarterly dividends that consist of over 90% qualified dividends and the rest in ordinary dividends. My income was high enough that I should be getting taxed at the 20% rate for the qualified dividends and ordinary income rates for the ordinary dividends.

On my 1099 DIV, it lumps the qualified and ordinary together on line 1A, and then list the qualified dividends separate on line 1B. When my CPA does my taxes, he takes the full amount from line 1A, which is qualified and ordinary dividends and then puts that on schedule B, which then gets put on line 1A on my 1040. That means I'm taxed at ordinary income rates for my qualified dividends, from what I can tell.

He says, that's correct. Is this right? If so, why do I not enjoy the tax benefits supposedly associated with qualified dividends? I asked him, but he has yet to respond other than to say he is correct to do it this way. Any light you can shed would be greatly appreciated. Thank you for your help.

Jonathan: All right, Brad, any gut reflex response there before Sean weighs in?

Brad: Other than the reflexive response, he is right. I am right. So just listen to me. That is not a reassuring answer from your CPA. So yeah. Would love to hear what Sean has to say.

Sean: Hi Brad, Jonathan. This is Sean Mulaney calling into respond to Mark's question about qualified dividends.

If you own an ETF or stock or a mutual fund in a taxable account, every year, you and the IRS get a form 1099 DIV. That form reports the dividend payments to the investor during the year so that they can be taxed by the IRS on the tax return.

And the way this works is there are two numbers that are relevant. Box 1A of the form 1099 will be the so-called ordinary dividends, and then box 1B will be the so-called qualified dividends. What the heck do those terms mean?

I'll compare those to a pie. The term ordinary dividends is the equivalent of the pie. That's everything. Every last dividend that's paid out is a so-called ordinary dividend. Qualified dividends are a slice of the pie, and in most cases, if you own a well-diversified US index fund, they're going to be the vast majority, over 90% of the pie, but they're only a slice of that pie.

So let's put some numbers to this, right? Let's say Mark gets paid $1,000 in dividends during the year. And 90% of those or $900 are so called qualified dividends. His 1099 DIV will report $1,000 as ordinary dividends. That's box 1A and that goes to box 3B on his form 1040.

And then his qualified dividends, which qualify for that long-term capital gains, preferred tax rate, which is what Mark and most of us want. Those are reported in one box B. They are subset of box 1A and they go to line 3A of Mark's 1040.

And from there the tax software takes care of it, right? It basically says, I've got $900 of dividends that qualify for the preferred rate. I've got $100 of dividends in this example that don't, and it'll compute the tax accurately based on those numbers.

Sometimes when you work with an advisor, there could be miscommunications. I don't know what exactly what's going on between Mark and his tax return preparer. I suspect what might be going on is a miscommunication. Meaning it may be the case that the qualified dividends, the total ordinary dividends are perfectly well entered into the tax return software and what's going on is for whatever reason, there's a mismatch in communication styles or some sort of communication gap between Mark and his preparer.

Theoretically, it is possible, although it's not likely, but it's theoretically possible that for whatever reason, the 1B number is not getting entered into the tax return software. And if that is happening, that would miscompute the tax in that situation. So I hope that explains what qualified dividends are and how they're taxed.

They qualify for the long term capital gains rate. And most tax return software programs should make that pretty easy to make sure that you're getting the tax break for federal income tax purposes on qualified dividends.

Brad: All right, so the big takeaway here for Mark and for all the listeners is if you think this is being done improperly, just go to page one of your 1040.

And as Sean said, look at lines 3A and 3B. And if items are put in both of those boxes, then you can be pretty darn certain that the tax software is calculating the tax in the background correctly.

Now, clearly, if he saw all of the dividends on one of the lines and it wasn't being broken out, then that is in all likelihood an error on the tax return preparer side. And you clearly need to just ask questions, raise alarm bells, just do whatever you have to do. But if you see items on both, there's a pretty high likelihood that's being properly handled.

Jonathan: Now, one of the reasons that in this case, Mark is very interested in whether or not it shows up as a qualified dividend being taxed at a federal capital gains level is because of favorable tax treatment on capital gains for individuals at certain income thresholds.

Now, I believe without having looked at it, and maybe you can kind of do that as I'm talking to tighten it up a little bit, but if you are making around or below a hundred thousand dollars a year, your capital gains treatment is very favorable. So, your dividends and capital gains at the federal level may be taxes as low as 0%.

Some states may tax you, so you may still get some tax on there depending on the state that you find yourself in. But at a federal level, that $100,000 threshold, you might end up not being taxed at all on those dividends as long as your income is below that threshold. Am I close enough to like hand you the ball?

Brad: Yeah. Jonathan, that is a pretty good summary. So qualified dividends definitely do qualify for preferred taxation rates. All right. So ordinary dividends are basically at your standard top marginal bracket, all right? But for the qualified dividends, it's either taxed for these capital gains rates at 20%, 15%, or zero depending on your tax bracket. So you clearly, clearly want qualified dividends, right?

So in Mark's case, if nothing is getting marked as qualified dividends, he's probably paying a significant amount of additional tax liability on these dividends. So that is why this is important.

And obviously, the tax brackets are always changing. We can put this in the shownotes to tell you exactly where you qualify for the 20%, the 15%, or the 0%, but rest assured that there is favorable taxation for qualified dividends.

Check out the 2019 tax brackets for capital gains here.

Jonathan: All right, man. Love it when you can throw a little math in there for you FI nerds. I'm with ya. I'm with ya.

Book Drawing

Unfortunately, that is going to bring this episode to a close. And as you know, we like to finish every episode by doing a drawing for a copy of a book that we have found useful. We're doing our book, ChooseFI: Your Blueprint to Financial Independence. This book can be found anywhere that books are found, and if you want to purchase a copy, you can find it very easily at choosefi.com/book.

If you want to win a copy, that's what I'm about to tell you how to do that right now. Just go to choosefi.com/itunes. Follow the instructions there. Leave us a short written review, and then send us an email to feedback choosefi.com letting us know where you left a review. Whether or not that'd be... I don't know, it could be Apple podcast, could be on Stitcher, could be on Castbox. Wherever you left that review, just send us an email letting us know what screen name you left it under. We give away one book for every five written reviews.

And to show you how long we've been doing this, I actually went back and calculated. We started it when we hit 50 reviews. I think we're well past 3,000 now. That's how many of you have taken us up on this offer. And I actually went back and it looks like we have given away literally hundreds of books at this point, ranging from some of our old favorites, like JL Collins Simple Path To Wealth, Dominic Quartuccio Design Your Future, Vincent Pugliese Freelance To Freedom.

Currently we're doing our book, ChooseFI:Your Blueprint to Financial Independence. So as a podcast, we want to encourage you to read more. I mean, it's an incredible way to take all the knowledge in a particular niche and funnel it down to something linear and concise, tangible that you can take away with you. It's a phenomenal, phenomenal resource. So anyways, take us up on this offer. Choosefi.com/itunes. MK, how many winners do we have today?

MK: Well, today we have one winner, and that's Aaron. Aaron writes, "Most actionable step by step guide to personal finance. Brad, Jonathan, and each guest provides the most actionable advice for transforming your finances and your life.

I went from a know-nothing, 22 year old to someone on a path to FI in a matter of months. I listened through the entire catalog in just four months, making small changes to my life the entire way. ChooseFI is more than just finances. It addresses lifestyle choices and outlooks that I haven't found anywhere else, would recommend to anyone who's looking for ways to improve themselves today, tomorrow, and every day moving forward."

Jonathan: Awesome. All right, my friends, the fire is spreading. We'll see you next time as we continue to go down the road less traveled.